Business Succession Documents: What to Sort First

A handover rarely stalls over the price. It stalls when the buyer asks for the lease agreements of the past ten years and the answer is that they are somewhere.

According to the Austrian economics ministry, 52,500 companies excluding one person firms are due for handover between 2025 and 2034, close to 23 percent of all employer companies, with around 705,000 jobs depending on them.

Which digital documents do you need for a business succession?

Seven bundles: accounting, contracts, staff, customers and orders, authorities, IT including access rights, and a description of the workflows. Each bundle sits in one place and has one named person responsible.

Due diligence is the buyer's review of a business before purchase, in which the figures, contracts and risks are traced through the documents provided. Whatever is not found there either lowers the price or ends up as a warranty in the contract.

• Accounting and tax: annual accounts and trial balances of recent years, tax returns, open items, notices from the tax office.
• Contracts: lease or tenancy of the premises, leasing, insurance, agreements for maintenance and supply, loans including collateral.
• Staff: employment contracts, side agreements, time records, holiday balances, promises that exist only verbally.
• Customers and orders: customer base, live orders with delivery dates, price lists, discounts granted.
• Authorities: trade licence, plant permit, company register entry, social insurance records.
• IT and access: every tool with cost and contract term, domain, mailboxes, licences, backups with the date they were last tested.
• Workflows: the tasks only one person knows, together with their decision rules.

How long do the documents have to be kept?

Seven years for books and records, for receipts and for business papers. That is the period the Austrian Federal Fiscal Code sets, according to WKO. For records relating to property WKO gives 22 years under the VAT Act, and ten years for records on electronically supplied services.

Electronic storage is allowed, but not in any form. Scanning and saving to a USB stick does not meet the requirements according to WKO, which calls for storage that keeps the data unalterable. A business running a cash register must additionally save the data logging protocol to an external medium every quarter according to WKO. Neglect here surfaces during the buyer's review.

Which access rights go missing most often in a handover?

The ones registered to a person rather than to the business. They work quietly for years and cannot simply be passed on the day of the handover.

• The domain is registered to the departing owner personally, not to the company.
• The mailbox holding the history of every customer conversation sits in a private mail account.
• Approvals for online banking and digital signatures run through a private phone number.
• Software was bought with a private address and the invoice goes to the same place.
• The Google reviews belong to an account whose password nobody knows.
• The backup runs to a hard drive in the departing owner's house.

The quickest way to this list is the accounts, because every recurring debit is a tool, a contract or an account. For each entry check whose name it is in and who can reset it. A change of holder for domains and mailboxes takes days rather than minutes, and it needs the departing owner while they are reachable.

Which data may be passed on in a handover?

For staff the law orders the transfer, for customer data it does not. Under section 3 of the Austrian AVRAG, according to WKO the acquirer enters the existing employment relationships with all rights and obligations, and the working conditions in place at the time of transfer remain in force.

Customer data, by contrast, changes controller, and that needs its own legal basis under Article 6 GDPR. A legitimate interest may come into play, that is not settled, and it belongs to a legal review beforehand. Useful here is the record of processing activities: according to WKO, Article 30 GDPR requires the purpose of the processing, categories of data subjects and of data, categories of recipients, transfers to third countries, erasure periods and security measures, kept in writing or electronically. Keep it current and half the handover data map exists already.

In which order do you tidy up the filing before a handover?

Starting from the question the buyer will ask. As a guide the effort runs three to ten working days spread over several months, depending on how many years and how many tools are involved.

1. 1.Take stock in a table with four columns: document, location, person responsible, status.
2. 2.Create the seven bundles and file everything that exists. Gaps stay visible.
3. 3.Move access to the business: domain, mailboxes, licences, banking, backup.
4. 4.Write down the workflows only one person knows. One page each, with the decision rules and not only the clicks.
5. 5.Have a third party read through the filing, for instance the tax adviser or a handover consultant from the chamber of commerce.

How these steps spread across the months before the date is on our business succession page. The slowest part is rarely the filing. It is the knowledge that exists only in the departing owner's head.

How do you know the documents are ready for handover?

When somebody else answers the buyer's questions without the departing owner. Three checks are enough: every recurring debit maps to a contract that can be found. For every system holding business data, a backup was restored in the past three months. And whoever is asked for a document in the business names the same location as the table.

Orderly filing does not lower the price, it supports it. Answering questions without searching puts you in a different position from someone who sends receipts afterwards. How the knowledge behind the documents is secured is covered in our post on knowledge retention, and where the business stays in the family, digitalisation in a generational handover comes on top.